New Relic Inc Received its Third Buy in a Row

By Ryan Adsit

After Oppenheimer and Pacific Crest assigned a Buy rating to New Relic Inc in the last month, the company received another Buy, this time from J.P. Morgan. Analyst Sterling Auty reiterated a Buy rating on New Relic Inc (NYSE: NEWR) today and set a price target of $50. The company’s shares opened today at $33.91.

Auty wrote:

“Heading into today’s analyst day the big question on investors’ minds was still the lingering concern coming out of the 2Q17 about billings growth. Management shared incremental info (graphs) to help understand what has been happening with contract duration in the base and contracts signed in the quarter. This was good, but probably will not eliminate the concerns completely. Likely it will take next quarter results with the seasonally strong enterprise renewal/expansions driving faster ARPU to get investors more comfortable. Separately, the focus was on the company’s plan to drive revenue to $1B run rate exiting FY22 with 8-12% operating margins.”

According to TipRanks.com, Auty is a 5-star analyst with an average return of 15.4% and a 64.3% success rate. Auty covers the Technology sector, focusing on stocks such as SS&C Technologies Holdings, CSG Systems International, and Synchronoss Technologies.

Currently, the analyst consensus on New Relic Inc is Strong Buy and the average price target is $44, representing a 29.8% upside.

In a report issued on November 8, D.A. Davidson also reiterated a Buy rating on the stock with a $49 price target.

Based on New Relic Inc’s latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $63.44 million and GAAP net loss of $14.13 million. In comparison, last year the company earned revenue of $42.93 million and had a GAAP net loss of $14.82 million.

Based on the recent corporate insider activity of 176 insiders, corporate insider sentiment is negative on the stock. Most recently, in June 2016, Steven Spurlock, a Major Shareholder at NEWR sold 22,010 shares for a total of $654,951.

New Relic, Inc. develops software analytics software. Its products enable organizations to collect, store and analyze massive amounts of software data in real time so they can understand their application performance, improve customer experience and achieve business success. The company was founded by Lewis Cirne in September 2007 and is headquartered in San Francisco, CA.